Federal Data Center Optimization Progress Continues, according to GAO

On Monday, GAO released a new report on federal data center consolidation which found agencies closed 58 data centers in FY 2021, they planned to close 78 in FY 2022, 22 of 24 agencies met their savings goals for FY 2021, and reduced spending for FY 2021 – 2022 was expected to reach $6.6B.

Federal data center closure and optimization efforts began in 2010. In FY 2016, OMB launched the most recent data center initiative, called the Data Center Optimization Initiative (DCOI). In June 2019, OMB updated the guidance for the initiative to align it more closely with FITARA objectives. Over the years, OMB repeatedly extended data center consolidation and optimization deadlines, most recently to September 30, 2022.  Additionally, the 14th iteration of the FITARA scorecard released in July 2022 contained the last reporting for the data center category.

GAO’s most recent analysis showed in FY 2021, federal agencies closed 58 data centers and planned to close 78 more by the end of FY 2022. Additionally, data center optimization cost savings for FY 2021 totaled $612.3M with planned cost savings of $334.3M for FY 2022. Agencies reached a cumulative total cost savings and avoidance of $6.6B from FY 2012 through FY 2021, according to GAO.

GAO’s report was based on an analysis of data center information from PortfolioStat, agency FY 2022 DCOI strategic plans and IT Dashboard data obtained from March 2022 through August 2022. Not all of this information is publicly available.  However, I did an analysis in January of FY 2022 year-end data center data published on the IT Dashboard, and found agencies closed 62 tiered and 103 non-tiered data centers in FY 2022. Additionally, the data showed $354.4M in FY 2022 cost savings against a goal of $314.4M for the year.  

GAO reported mixed progress for agencies in meeting other optimization targets in FY 2022. As of September 2022, GAO reported that 13 agencies met the virtualization target, 17 met the availability target, and 14 met the metering and utilization targets. Additionally, seven agencies do not have any agency-owned data centers or their remaining centers are exempted from optimization by OMB.

GAO’s latest report also stated that of the 126 recommendations GAO has made since 2016 regarding data center optimization, 110 have been implemented.  GAO recommends that agencies implement the remaining 16 recommendations in order to meet optimization targets. 

The report did not specify the 16 remaining recommendations, however, a search on GAOs website for open recommendations related to data centers retrieved the following list:

• March 2020 – OMB should require agencies to explicitly document annual data center closure goals in their DCOI strategic plans and track those goals on the IT Dashboard.
• March 2020 - OMB should require agencies to report in their quarterly inventory submissions those facilities previously reported as data centers, even if those facilities are not subject to the closure and optimization requirements of DCOI.
• April 2019 - DOD should take action to meet the data center optimization metric targets established under DCOI by OMB.
• April 2019 - Energy should take action to meet the data center optimization metric targets established under DCOI by OMB.
• April 2019 - HHS should take action to meet the data center optimization metric targets established under DCOI by OMB.
• April 2019 - Treasury should take action to meet the data center optimization metric targets established under DCOI by OMB.
• April 2019 - NSF should take action to meet the data center optimization metric targets established under DCOI by OMB.
• April 2019 – SBA should take action to meet the data center optimization metric targets established under DCOI by OMB.
• September 2017 - OMB should direct the Federal CIO to formally document a requirement for agencies to include plans, as part of existing OMB reporting mechanisms, to implement automated monitoring tools at their agency-owned data centers.
• September 2017 - Agriculture, Commerce, DOD, Homeland Security, Energy, HHS, Interior, Labor, State, Transportation, Treasury, VA, the Attorney General, EPA, GSA, SBA, OPM, NRC should take action to complete plans describing how the agency will achieve OMB's requirement to implement automated monitoring tools at all agency-owned data centers by the end of FY 2018.
• September 2015 - OMB should direct the CIO, as part of any future update to the agency's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.
• June 2015 - OMB should document what qualifies as energy-related savings and the allowable proportion of energy and energy-related cost savings.

Although the DCOI effort is essentially complete from a policy perspective, federal contractors should continue to see opportunities to assist agencies with data center optimization efforts. Opportunities still exist in the areas of application rationalization, infrastructure modernization, cloud migration, and shared service migration.